Distinguishing IT Tiger Cubs from Leviathans

Photo: Keven Law
4/22/2013 11:08 AM
Category: Opinion

Estonia's vaunted startup culture gets a great deal of press, but it's far from the full picture. It's the more established players that are driving the industry and providing steady employment, writes Andrei Tuch.

Whenever a friend - local, expat, or foreigner intending to move to Estonia - tells me about the difficulty of finding a job, my first question is, “Can you code?” Because if you can, there’s a job waiting for you already.

Even in the worst days of the economic crisis, Estonia’s IT sector remained more or less shielded from the storm, and now that it’s 2013, times are good again. At the time of writing, Estonia’s most popular job search website lists an even 200 infotechnology job opportunities - the most popular category, just barely ahead of sales. It’s a safe bet that the average salary in the former is a bit higher as well.

Estonia’s IT achievements are widely publicized, mostly in foreign media admiring our e-government solutions and ubiquitous free WiFi, or bemoaning the cyber-criminals behind some of the Web’s most far-reaching scams. Local and regional coverage tends to focus on startups and incubators, tiny companies doing exciting things on the Internet.

But while the startup culture is certainly beneficial and necessary, this is not the full picture. Estonia’s IT industry is not surging forward, pulled by leaping tiger cubs - it is riding on the back of unflappable leviathans.

The most famous bit of software ever to come out of Estonia is not Fortumo’s mobile payments platform (or the DNS Changer worm) - it’s Skype, once a startup, but now, after passing through the hands of eBay and into Microsoft’s, firmly a corporate entity. For Tartu, the country’s second biggest town, the largest private source of revenue is not Neinar Seli’s real estate empire - it’s Playtech, a company that does not market anything to Estonian consumers. We might feel some small satisfaction at Tallink’s conquest of passenger traffic on the Baltic, but how many regular Estonians cheered when Webmedia bought out a Finnish software company? That homegrown powerhouse, now under the Nortal brand, is now selling e-government solutions to the likes of Qatar and Nigeria, and arguably doing more good for Estonia’s image as a center of software excellence than the NATO Cyber Defense hub.

A software engineer drawn to Estonia by whatever mysterious (but usually blonde) reasons, or indeed a young prodigy coder, are faced with a choice between two broad categories of employer: the startup or the corporation.

While the big names mentioned above did begin as startups themselves, though others didn’t (think of the unbundled telecoms monopoly Elion, the IT division of Swedbank, or the Silicon Valley grandpa Symantec, which had been a large corporate entity long before establishing its low-key but surprisingly extensive presence in Tallinn), they are now firmly on the corporate side of the work process, where consistency and reliability is more important than getting a proof-of-concept out of the door as quickly as possible.

The choice is not trivial, and each side has its advantages. If you want to work on cutting-edge solutions, turning wild ideas into reality and doing things which nobody else in the world has done before, you want to join a startup. An established software enterprise may be interested in setting the world on fire, in the abstract, but it will primarily care about an incremental increase in the efficiency of some obscure number-crunching protocol deep within the bowels of its main money-making application.

On the other hand, the inefficiency and slow decision process in the kind of company that occupies a whole building belies redundancy and built-in buffers: there will be very few days when you will not be able to go home at six in the evening. (There are certain sectors of the IT industry where corporate employees frequently endure horrible working conditions, most famously video game development, but that is not really relevant to Estonia.)

The other big upside to working in an enterprise environment is income security. The big fish in this particular small pond barely downsized after the 2008 crash, and if you’re hired, you can be sure that the company intends to keep you around for many years. Sure, you can make a lot of money if you get equity in a startup that builds a cool product quickly and gets sold to Apple or Google (or eBay and Microsoft, as the case may be), but despite the widespread enthusiasm, that actually does not happen to very many people; you are more likely to leave a software startup with nothing more valuable than an impressive line in your CV.

And despite the somewhat ridiculous amounts of venture capital around these days looking for ideas and teams to invest in, the platonic ideal of a startup is still two or three guys working out of their bedrooms and eating instant noodles. When you start looking for a mortgage, that pile of stock options will be a lot less convincing than a string of salary transfers from the company whose logo is on the bank manager’s desktop.

One thing is certain: if you are looking for a good job in Estonia, learn to code.

Andrei Tuch does something obscure and difficult to explain with computers for a living. At different times, he has been paid by several of the companies mentioned in this article.

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